Leasing Arrangements

12 Months Ended

Dec. 31, 2015

The Company leases certain office and warehouse facilities, retail stores and machinery and equipment under noncancellable capital and operating leases that expire at various dates through 2031. Many leases include renewal and/or fair value purchase options.

Future minimum capital and operating lease payments at December 31, 2015 are:



	Capital Leases		Operating Leases
2016	$	1,732	$	31,671
2017	1,732		25,513
2018	2,022		20,600
2019	1,521		15,888
2020	1,105		13,436
Subsequent to 2020	2,890		34,988
Total minimum lease payments	11,002		$	142,096
Amounts representing interest	832
Present value of net minimum lease payments	10,170
Current maturities	1,504
Long-term capital lease obligation	$	8,666

Rental expense for all operating leases was $35.8 million, $39.8 million and $45.0 million in 2015, 2014 and 2013, respectively. The Company also recognized $0.8 million, $0.7 million and $0.6 million in 2015, 2014 and 2013, respectively, for rental income on subleases of equipment and buildings under operating leases in which it was the lessee.

KC accrued $1.2 million in early lease termination penalties within "Selling, general, and administrative expenses" for the year ended December 2014. These penalties arose as a result of early exit provisions in certain operating lease contracts permitting KC to exit these sites in the first half of 2015 rather than upon lease expiration in outlying years.

Assets recorded under capital leases are included in property, plant and equipment and consist of the following:



	December 31
	2015		2014
Plant and equipment	$	4,807	$	4,807
Less accumulated depreciation	2,529		1,927
	$	2,278	$	2,880

Depreciation of plant and equipment under capital leases is included in depreciation expense in each of the years ended December 31, 2015, 2014 and 2013.

Capital lease obligations of $2.2 million were incurred in connection with lease agreements to acquire plant and equipment during 2013. No capital lease obligations were incurred in 2015 and 2014.